The social market economy, Soziale Marktwirtschaft, is the main economic model used in West Germany after World War II. The social market economy is a mixed economy, combining private enterprise with government regulation, maintaining a balance between a high rate of economic growth, low inflation, high employment, good working conditions, social welfare, and public services. The term social was chosen rather than socialist to distinguish the social market economy from a system in which the state directed economic activity or owned the means of production.
German zeitgeist is leading the way out of the global depression. German economy has shown itself to be astonishingly resilient amid the global economic turmoil. Germany's gross domestic product (GDP) rose by three percent in 2011. It's been a record-breaking year for the German economy. This year, German companies exported goods worth over one trillion euros, the highest figure ever. The number of people in work has also risen to 42 million, more than ever before.
Basil Venitis points out Bundespresident Wulff, Bundestag, Bundesrat, Bundesbank, and Karlsruhe resent squandering German taxpayers' hard-earned money for bankrupt Graecokleptocrats. Especially, Vice-Chancellor Philipp Roesler and Foreign Minister Guido Westerwelle are smart libertarians, and they cannot be hoodwinked by Graecokleptocrats.
Germany's new philosophy is best summarized by Foreign Minister Guido Westerwelle: When you take the lead, some people criticize you. If you don't take the lead, everyone criticizes you. So it's better to lead.
Merkel says: It's in my character to be consistent, whether I'm speaking with you, with party colleagues, with the Bundesbank or with my European partners. I am not duplicitous. That is my advantage. We need more not less Europe. If euro fails, Europe fails. The solution of depression lies in binding Europe closer together through strict budget discipline.
German politics, based on consensus and with many inbuilt checks and balances, does not encourage bold action. Merkel must constantly find compromises within her coalition, with parliament, with regional governments and with the constitutional court. All of them are part of the debate. So too is the German central bank, the Bundesbank, over which Merkel has no control.
Merkel hides a very important fact from Germans. Germany is never going to get back the money it lends to Greece, because Graecokleptocrats plan to withhold 100 billion euros as reparation for a Second Word War loan! German reparations is a very hot issue in Greece, and everybody can predict the climax of the infamous bailout.
Under the terms of the peace treaty that was signed in 1990, Germany did not have to pay further reparations to other countries for war damages. Greece accepted the treaty, although the issue of compensation was periodically raised by Graecokleptocrats, mostly to score points in politics.
But if the 476 million reichsmarks lent against its will to Germany by the Greek National Bank during the war is not considered damage but a form of a normal credit, then Greece would be entitled to get the money back. Without interest, the amount in today's money would amount to $14 billion. With interest over all these years, the final value exceeds 100 billion euros!
Venitis notes Germans abhor the Nazi dream for Europe - ein Volk, ein Reich, ein Fuehrer. The European project has lost significance among Germany's policy elite as the central driver of foreign economic policy. No clear grand strategy has replaced this Einbindungspolitik, German foreign policy tenet of engagement. Given the heavily-fragmented nature of checks and balances in German politics, the political elite seems to be buffeted by a cycling of priorities from regional elections to Chancellory infighting. The end result has been a series of policy reversals and costly delay. http://venitism.blogspot.com
Merkel declares Fourth Reich lives through its toughest hour since the Second World War. Merkel dislikes putting her foot down to solve government disputes. She associates that form of exercising authority with ill-tempered men who use arrogance to make up for their lack of competence. Merkel thinks people who keep banging their fist on the table end up getting ignored in the long run. Merkel's wings have been clipped, and now she faces even bigger problems ahead. There are rumblings within the FDP and the CSU that could distance the two parties even more from Merkel.
Merkel reinforces her opposition to eurobonds, declaring that a communistic collectivization of debt would leave the bloc's members worse off. This is communism, pure and simple! Germany, Europe's largest economy, would face extra costs of a hundred billion euros a year through the alignment of interest rates with nations that pay more to borrow. Eurobonds lead us to a debt union, not to a stability union.
Eurobonds create a transfer union. Eurobonds would benefit profligate PIGS, especially corrupt Greece, whose borrowing costs on the open market have become prohibitively expensive, but they would expose fiscally sound countries like Germany to more risk, increasing the country's low interest rates. Eurobonds would subsidize the dolce vita of PIGS.
Merkel rejects joint eurobonds as absolutely wrong. Restoring stability to the single currency bloc requires a longer-term step-by-step approach. We must move away from a debt union and toward a sustainable stability union. This won't be easy but it is right. In order to bring about common interest rates, you need similar competitiveness levels, similar budget situations. You don't get them by collectivizing debts.
Merkel points out that if the debt all goes into the one pot, you have difficulty figuring out where it all comes from. Spreading risk through eurozone would place Germany on a slippery slope where in the best case it would be on par with the European average, or, we all get worse together. Instead, a European framework needs to be developed in which a regulating body must have a right to intervene in order to bring fiscal discipline to failing budgets.
Eurobonds violate the Maastricht Treaty, which stipulates that no country can be held liable for another country in Fourth Reich (EU). Eurobonds would even elevate liability to the level of a principle and force Germany to vouch for the debts of other countries whose fiscal behavior they cannot control. Germans would not tolerate the tax increases and reductions in transfer payments that this would necessitate.
Eurobonds would not be as safe as German government bonds. And since they would stimulate even heavier borrowing, they would have to yield higher rates. In the wake of the current bailout measures, the German government burdens taxpayers with risks worth one trillion euros. Likewise, over the last year, risk premiums for German government bonds have doubled. There simply isn't any more room for maneuver.
Bundesbank president Jens Weidmann used to be one of Merkel's closest advisers. Now, he is one of her staunchest critics over the euro rescue. He is strictly opposed to the European Central Bank's policy of buying up bonds from debt-stricken countries and is winning a growing number of allies for his cause.
Weidmann has criticized decisions related to the euro bailout as inconsistent and highly risky. He has called on politicians in Berlin to change their course, and he has been advocating the Bundesbank's principles regarding stability. All of those things put him at odds with top officials at the European Central Bank (ECB).
Weidmann is strictly opposed to loose ECB measures. He believes they amount to an unacceptable means of financing states through effectively printing money. In fact, he has come to assume the mantle of the last staunch defender of monetary stability.
Schaeuble asserts Fourth Reich needs a process that deals with sovereign insolvencies, while solidarity in the bloc has its limits. There's been a fundamental shift in how markets view sovereign debt, and preventing contagion is a tremendous challenge. Now is the time for bold steps in Fourth Reich. Now is the time to expel those member countries which violate the Lisbon Treaty.
Schaeuble can be an extremely polite man when he wants to be. At the same, the many difficult years he has spent in politics have equipped with an incomparable sarcasm. Schaeuble often walks a fine line between derision and civility.
Vice-Chancellor Philipp Roesler warns Graecokleptocrats have a choice, reforms within eurozone or no reforms and expulsion. There is no third way. Shape up or ship out, pure and simple! The Greek government must stop violating the Lisbon Treaty. Graecokleptocrats are ungrateful to Germans, and at some point German patience will end. Germans are near the limit of elasticity.
Everyone in the tech world seems to be talking about Berlin right now. Investors consider it the Silicon Valley of Europe. Berlin is perceived as a cool city for tech people, perhaps because it is more of a culture city than a financial one, and that makes it more interesting for entrepreneurs. It is also much easier to find a place to live than elsewhere and it is certainly cheaper to find office space.
There are many calls for a ban on the far-right National Democratic Party of Germany (NPD), seen as a central pillar of the right-wing extremist scene. NPD considers the German constitution a diktat imposed by victorious Western powers after World War Two. But there are no calls for a ban on the far-left Left Party, successor to the former East German communist party, which is seen as a central pillar of the left-wing extremist scene, such as the Red Army Faction (RAF) and the Baader Meinhof gang. Many Germans are upset of the double standards.
Germanokleptocrats zealously give interview after interview against NPD. They rattle off the same sound bites as always, and give the same answers to the same questions. The appearance, though, is that of a dynamic and far-reaching response to the horrific revelations of the neonazi terror cell National Socialist Underground (NSU).
The government and the Constitutional Court at Karlsruhe are locked in one of their biggest power struggles to date. Judges at the court describe it as a latent constitutional crisis. The government is trying to free itself of the restraints imposed on it by the constitution and by the court.
The president of the court, Andreas Vosskuehle, muses the perception of his court is at present ambivalent in parts. On the one hand, the court had been credited for ensuring that European unity remained on a secure legal and democratic footing. But on the other hand, it is seen by some as an obstacle in overcoming the current crisis.
As a result, efforts underway in Berlin to change the constitution are being viewed with mixed feelings in Karlsruhe, because they are aimed at opening up greater room for maneuver in future dealings with the court.
If the constitution were to be replaced with another version through a popular referendum, this would be radical, but couldn't be criticized. But it appears that some among Chancellor Angela Merkel conservatives are considering removing the court's control over the political process through a normal amendment of the constitution. The legislature could simply deprive the judges of their jurisdiction in questions of European integration.
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